A Familiar Stranger : Signals of Exit Modes and Top Management Team Turnover During the Founder Exit Process

This study explores the signaling dynamics in the CEO-TMT interface during the founder exit process. We theorize the initial familial appointment as a substantive signal for the founder's future choice of exit modes, influencing top managers' perceptions and career decisions. To interpret CEOs' hidden intentions, managers combine different signals and process them holistically. Analyzing Chinese listed lone-founder firms, we find a positive link between initial familial appointments and voluntary turnover rates of nonfamily TMT members. This effect is strengthened by a high familistic cultural imprint or celebrity capital of the founder but weakened when the founder expresses strong entrepreneurial orientation. By incorporating signaling process into social interactionism perspective, this study enhances our understanding of the CEO-TMT interface and sheds light on TMT's sensemaking processes